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S. Korean major firms' Q1 earnings outlook grim amid weak global chip demand

By Yonhap

Published : April 2, 2023 - 10:43

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(Samsung Electronics) (Samsung Electronics)

The first-quarter earnings outlook for South Korea's major companies, including the world's leading chipmakers Samsung Electronics Co. and SK hynix Inc., remains grim due mainly to sluggish global demand, an analysis of industry data showed Sunday.

According to securities firms' forecasts compiled by Yonhap Infomax, Samsung Electronics is projected to have posted an operating profit of 720 billion won ($549.7 million) during the first three months of the year.

It marks a 94.9 percent drop from its first-quarter result of 14.1 trillion won from a year ago.

Samsung's sales in the January-March period are forecast to have fallen 17.3 percent on-year to 64.3 trillion won.

SK hynix will also highly likely remain in the red for two quarters in a row.

The company seems to have recorded an operating loss of 3.8 trillion won for the first quarter, with its sales having plunged 60.1 percent on-year to 4.9 trillion won.

This file photo shows the company's new chip factory, the M16, in Icheon, 52 kilometers southeast of Seoul. (SK hynix Inc) This file photo shows the company's new chip factory, the M16, in Icheon, 52 kilometers southeast of Seoul. (SK hynix Inc)

The whopping decreases in earnings were apparently attributable to waning global demand for memory chips amid the economic slowdown.

The Yonhap Infomax analysis also predicted declines in the first-quarter profits of key South Korean petrochemical firms and steelmakers.

LG Chem, a leading chemical producer in South Korea, is expected to announce an operating profit of 535.5 billion won, down 47.7 percent from a year earlier.

Kumho Petro Chemical Co.'s first-quarter operating profit is estimated to have nosedived 81.8 percent on-year to 81.9 billion won.

Posco Holdings Inc., the country's biggest steelmaker, is forecast to report a 72 percent drop on-year to 632 billion won.

However, carmakers and battery manufacturers appear to have fared relatively well in the first quarter on the back of the fast-growing electric vehicle market.

Hyundai Motor Co. and Kia Corp. are forecast to have recorded operating profits of 2.8 trillion won and 2.1 trillion won, respectively, during the January-March period, up 44 percent and 32.4 percent from a year earlier.

LG Energy Solution, the country's largest battery maker, is likely to have earned 499.1 billion won in operating profit for the first quarter, nearly doubling from the previous year's 258.9 billion won. (Yonhap)